Brazil's president failed to win reelection on Sunday and will head to a run-off vote, after claims of dirty campaign tricks eroded the support that until recently seemed to guarantee his triumph.
President Luiz Inacio Lula da Silva, 60, led the election but fell over one point short of the 50 percent that would have secured him a second term.
He now heads to an Oct. 29 face-off against former Sao Paulo governor Geraldo Alckmin, who with 41.6 percent was seven points behind the president after virtually all ballots were tallied.
"I head to the second round with major possibilities of winning the election," Alckmin told jubilant supporters early yesterday.
Lula did not make any immediate appearance, but Minister for Institutional Relations Tarso Genro emerged from a meeting with the president saying: "We were ready for the first round, and we also will be ready for the second round."
Lula saw support slip in the last days of his electoral campaign amid growing discontent over campaign dirty trick scandals that implicated top officials in the government and his leftist Workers Party (PT.)
Alckmin capitalized on the sleaze, saying Brazil needed a clean government and that Lula had a lot of explaining to do.
In the latest scandal, two PT officials were arrested in the middle of last month with almost US$800,000 in cash they allegedly planned to use to buy documents that allegedly could tie Alckmin to a corrupt deal.
The challenger's campaign filed a lawsuit alleging Lula benefited from "abuses of power."
The PT responded by filing a countersuit that charged Alckmin's campaign made "undue" use of the media to damage the president's candidacy, after photographs of the confiscated cash were leaked to newspapers.
Despite growing discontent over the scandals, Lula remains popular among the millions of impoverished Brazilians thanks to an anti-poverty program under which 11 million struggling families get up to US$45 a month in government subsidies.
And the financial and business communities no longer perceive Lula as a dangerous firebrand leftist.
Since Lula took office in 2003, the government has maintained orthodox economic policies and restored public finance, while increasing the minimum wage.
"Brazil is doing very well," said 42-year-old economist Guilherme Marbach, after casting his ballot in Sao Paulo.
"All the economic fundamentals are very good, all that is needed now is to speed up growth," Marbach said.
Alckmin has described economic growth -- projected at 3 percent this year -- as pathetic, saying it fell well short of its potential.
The former Sao Paulo governor, who has gained a reputation as a solid administrator, does not suggest a radical departure from the current government's policies.
He says that, if elected, he would tighten public spending so taxes and interest rates can be slashed in order to encourage growth.
And he pledged to clean up corruption.
"What we need is a more honest president," said salesperson Eliene Dutra, 49, after voting at a school in Sao Paulo's city center.
Last year, a scandal over illegal campaign financing, had forced several Cabinet ministers and PT officials to resign last year.
Lula has insisted he had no knowledge of that and other scandals until they came to light.